Paying for goods

• Ask your students the following question.

You and your family are off to buy you something you have wanted or needed for a long time. It could be clothing, sports gear, a new CD or something to play the CD on. Name some different ways your family could pay for the goods you want to buy.

• Make sure students include using money or paying by cash (notes and coins), cheque, credit cards and by EFTPOS in their answer. Make sure the students are aware that adults must have the money in the bank before they use a card or a cheque.

• This activity is focused on money but you could extend the activity by finding out what your students know about using cheques, credit cards and EFTPOS and set up some research tasks to extend their knowledge.

• Ask the students how they would pay for the goods if they were going to buy the item themselves.

• Discuss with the students the idea that how people pay for goods is changing with time.

Twenty years ago people paid for goods by using cash or cheques. Today the most common way to pay for goods is by using EFTPOS. In New Zealand, for example, between 80% and  90% of all purchases at supermarkets are paid for with EFTPOS.  Children and young people under 12 cannot open and use an EFTPOS account so they must use cash.

• Ask the students if we can use any sort of money in New Zealand.  Discuss the fact that we can only use New Zealand money (notes and coins) to buy goods in New Zealand.

• Ask the students what New Zealand notes we have. We have $100, $50, $20, $10 and $5 notes.  You can have students investigate the colour of these notes and the images on the notes by looking at the Explaining Currency booklet supplied to your school and available on the website www.newcoins.govt.nz

• The booklet Explaining Currency explains what New Zealand does to make notes difficult for people to copy, or make and use a forged bank note. You could have students use the information in the booklet to explain the process used to make New Zealand bank notes that are hard to copy.

• The activities provided here do not include an investigation of the history of money, or the history of money in New Zealand with, for example, the historic day in 1967 when New Zealand adopted decimal currency.  Students could research the history of New Zealand money and present it as an illustrated timeline using information in the booklet Explaining Currency.

Interesting Coin Fact

It is estimated that, at any time, a New Zealand household has seven coins per person that are in use, and that the household has 160 coins stored somewhere in the house.

The figures about stored coins is an average figure, with some families having many more than 160 coins stored and some families having few or no stored  coins.

The figure of seven coins per person includes everyone in the family, including babies so adults may have more coins in their pockets, wallets or purses.

What will happen when there are no 5 cent coins?

In this activity students will add up the cost of some items, do some rounding up or down and give change.

To provide a list of items students can work with ask each student to go home and find out the price of an item they would like to buy that is under a limit you set ($5, $10 or $20 - perhaps depending on the age of your students and the sort of items your students want to include e.g. food, drink).

• When your students have brought in the prices for goods they wanted to buy make a list of all the goods with their prices.

• Discuss the fact that the same item can be a different price at different shops. The person selling the goods can set the price, the buyer decides whether they want to pay the price or not. Usually bigger stores like supermarkets that sell larger numbers of the goods can sell them more cheaply than a small store. Stores like the supermarkets or large chain stores can offer special deals.

• Discuss the fact that goods that are specials are often sold at $3.99 not $4.00. If you just buy that item and pay by cash you have to pay $4.00 for the item because we do not have 1 cent pieces.

Shops round up or round down prices for goods. After 31 July 2006 shops will have to round the price of goods up or down to the nearest 10 cents.

In most shops this is likely to mean that:

goods ending in 1, 2, 3, 4, or 5 cents will be rounded down

goods ending in 6, 7, 8, or 9 cents will be rounded up.

This means that if something costs 21, 22, 23, 24, or 25 cents then it will be rounded down to 20 cents. If the item costs 26, 27, 28 or 29 cents it will be rounded up to 30 cents.

If you buy more than one item the cost of all items will be totalled up and the rounding up or down will be on the total cost of the goods.

Rounding up will only be used if you are paying cash. If, for example, you buy all your groceries at the supermarket and you pay by cheque, credit card or EFTPOS you will pay the exact sum for your groceries.

If you pay for the groceries by cash the total of all the groceries will be rounded up or down, so the most extra you could pay by using cash is five cents.

• Set up some opportunities for your students to become familiar with rounding up or rounding down. The approach described below uses the list of goods and prices your class has assembled, but you could do this activity using supermarket or store promotional brochures. However, these promotions do not always give examples of goods that interest students.

• Use the list of goods and prices that the students have assembled, or store promotional material.

• Set an amount of money the students have to purchase goods with.

• Have the students:

  • choose to buy one item

  • round the item up or down

  • work out the change they will receiv

• Have the students practice rounding up or down when you buy two or more goods by getting the students to:

  • buy more than one item and add the total

  • round the total up or down

  • work out the change they will receive.

Coin-operated machines

• Ask the students:

  • what machines they use that take coins

  • what other machines they know about that take coins

  • how they think the machine recognises that you have given it a New Zealand coin

  • if you always need to have the correct money to purchase something from a snack food or drink machine

  • how the machine can recognise how much money you pay in and give you the right change

  • if you can 'fool' the machine by putting in an Australian coin or a coin from one of the Pacific Islands, or a metal washer.

• Explain to the students that the machine has a number of ways of recognising the coins.  Some sophisticated machines measure 10 or more properties of a coin before they accept or reject the coin. 

Machines recognise the size and weight of coins. Most modern machines recognise the 'electromagnetic signature' of a coin by passing it through an electric current. The reading identifies, very precisely, the amount of certain metals in the coin. This tells it if it is a New Zealand coin and what value the coin has. Coins from different countries are rejected by the machines because they are made with a different 'electromagnetic signature.' 

The new New Zealand coins have a plated steel centre and layers of nickel and copper. When the copper is the outside layer, like the 10 cent coin, the coin looks reddish. When the nickel is on the outside the coin has a silver appearance like the 50 cent and 20 cent coin. The $1 and $2 coins are made differently and do not have a steel plate centre. They are aluminium-bronze coins.

All the owners of coin-operated machines that use 50, 20 and 10 cent coins will have had to alter their machines so they can recognise the new coins.  Machines that only use $1 and $2 dollar coins will not need to change because the $1 and $2 coins are not changing.

New coin-operated machines that use electromagnetic signatures reject all foreign coins or bits of metal that do not have the same electromagnetic signature as our coins, so you can't 'fool' the machine.